Affirm Expands Apple Pay Partnership to In-Store, Poised for Significant GMV Growth

Affirm Holdings, Inc. (AFRM) has significantly expanded its collaboration with Apple Pay, introducing a buy-now-pay-later (BNPL) option for in-store purchases directly through the Apple Pay wallet. This development marks a pivotal moment for Affirm, enabling it to access a substantial segment of the retail market previously less penetrated by its BNPL services.

The Event in Detail

Effective immediately, Apple Pay users can now select Affirm as a payment option for in-store purchases. This integration allows consumers with iPhones running iOS 26 or later to add Affirm within their Apple Wallet, facilitating a quick eligibility check and offering flexible payment plans, including options with 0% APR and no late or hidden fees. This expands upon Affirm's existing partnership with Apple for online and in-app checkouts. The move by Apple effectively replaces its own short-lived Apple Pay Later service, signaling a strategic pivot towards leveraging established third-party BNPL providers. Notably, Klarna, another prominent BNPL provider, also recently announced a similar in-store integration with Apple Pay, highlighting a broader industry trend.

Analysis of Market Reaction

This expanded partnership has generated a bullish sentiment among analysts, with Evercore ISI reiterating an "Outperform" rating and a $100.00 price target for Affirm's (AFRM) stock. The firm emphasized that this development "reinforces our growth thesis for AFRM as its best-in-class BNPL product can now more easily and conveniently access untapped in-store GMV through Apple Pay's tap-to-pay platform." Other financial institutions have also shown confidence, with Goldman Sachs maintaining a "Buy" rating with a $105.00 price target, and Mizuho and UBS raising their targets to $108.00 and $85.00, respectively. Affirm's stock has already demonstrated robust performance, surging 103.3% over the past year, significantly outpacing the industry's 40.3% growth. The company's market capitalization stands at $29.12 billion, reflecting strong investor confidence. This market optimism is underpinned by Affirm's recent strong financial results, including a Q4 earnings beat where the company reported earnings of 20 cents per share against analyst estimates, and a 33% year-over-year revenue climb to $876 million. The company also turned a net income profit of $69.2 million from a $45.1 million loss in the prior year. Gross Merchandise Volume (GMV) jumped 44% from the year-ago quarter, surpassing street estimates by nearly $1 billion. A key driver has been Affirm's physical Affirm Card, which saw its GMV explode by 132% to $1.2 billion, active cardholders nearly double to 2.3 million, and crucially, in-store spending surge by 187%.

Broader Context & Implications

The strategic importance of this partnership is underscored by the vast size of the in-store commerce market, which industry data suggests is more than five times larger than e-commerce. While U.S. retail e-commerce sales reached $304.2 billion in Q2 2025, accounting for 16.3% of total sales, the remaining majority represents a significant growth opportunity. Apple Pay's extensive network, estimated to be viable at approximately 80% of global point-of-sale terminals, provides Affirm with unprecedented reach into this physical retail segment. Digital wallets already account for over one-third of checkout share, indicating a strong foundation for adoption. The competitive landscape within the BNPL sector is intensifying, with major players like PayPal Holdings, Inc. (PYPL) and Visa Inc. (V), alongside Klarna, vying for market share. However, Affirm's integration with Apple Pay positions it advantageously to capitalize on the secular growth tailwinds of BNPL. While the sector faces challenges such as rising interest rates and potential credit losses, Affirm's ability to secure prime partnerships and demonstrate robust operational performance, including a 47.2% year-over-year increase in transaction count in fiscal 2025, suggests a resilient growth trajectory. Its forward price-to-sales ratio of 6.99, while above the industry average of 5.82, reflects investor expectations for continued strong revenue growth, with analysts projecting a 23.4% year-over-year increase for fiscal 2026 revenues.

Expert Commentary

Analysts at Evercore ISI expressed strong confidence in the seamless integration and potential for adoption:

"We view this advancement as a significant opportunity that reinforces BNPL's secular growth tailwinds, and for AFRM to benefit more than other platforms given its top tier status." The analysts, who tested the new feature with iOS 26, described the onboarding process as "pretty smooth," further boosting confidence in adoption potential.

They anticipate that this partnership could help sustain "mid-to-high 20%s GMV growth into FY28," indicating a prolonged period of expansion for the company.

Looking Ahead

Investors will be closely watching for further details on early adoption trends, which are expected to be provided during Affirm's September earnings call. The success of this in-store expansion will be crucial for Affirm to maintain its leading position in a competitive and evolving BNPL market. The continued shift towards digital payments and the convenience offered by BNPL services in physical retail settings are key factors that will likely drive Affirm's performance in the coming quarters and years. The market will also monitor the broader economic environment, particularly interest rate movements and consumer spending patterns, as these factors can influence the overall health of the BNPL sector.